"Fiscal union" is a code-phrase for a highly profitable debt-serfdom: the banks
profit, the EU bureaucracy flourishes and the people of the EU are imprisoned in a modern serfdom.

The stock and bond markets are gearing up to celebrate the EU's approval this Friday
of "fiscal union," the necessary surrender of sovereignty that's needed to
seal the bondage of the EU's hapless citizenry to the banks and the lapdog bureaucrats
slavishly devoted to their dominance.

"Fiscal union" is the code-phrase for the EU nation agreeing to automatic sanctions
(penalties) should their borrowing exceed what is deemed prudent. In this sense, it's
little different from the 3% deficit limit that the member states agreed to via
the initial treaty but conveniently ignored.

The "teeth" of automatic sanctions is supposed to force nations to "tighten up"
their fiscal and tax policies (including collection)--"austerity" at the fundamental
economic and governmental levels.

In other words, "Oops, we borrowed too much, default looms, let's paper over the insolvency
by really really really promising to borrow less from now on."

The mechanisms of the overborrowing--overleveraged, politically dominant banks and the euro--are left untouched.
Why? For the "obvious" reasons the mechanisms of EU governance has been captured by the banks
and their apparatchiks, and as a result of the quasi-religious devotion of the Eurocrats
to the single currency, a catastrophically wrong-headed fantasy that they cannot give up
without losing face.

I described the systemic problem with "austerity and higher taxes" as a "solution" to
crushing debts in
It's Your Choice, Europe: Rebel Against the Banks or Accept Debt-Serfdom
(December 5, 2011): it sets up a positive (mutually-reinforcing) feedback loop
where diverting more of the national surplus to pay interest on old debt leaves less
for productive investment, a cycle of indenturement to debt that ratchets the
risk of default ever higher, which drives interest rates up which then increases the
cost of servicing all that crushing debt which then diverts more of the national
surplus (via austerity and higher taxes) to paying the higher interest.

Every euro shipped off to the banks and bondholders is a euro that isn't going to be spent
in the national economy, which means the economy contracts from a dearth of investment,
income and spending. "Growing our way out of debt" is impossible in this indentured-to-debt
positive feedback loop.

In a functioning democracy, then those who reaped the gain
(the banks) would actually be exposed to the risk that accompanied their gain. But sadly,
the EU is not a democracy except as a simulacrum propped up for PR purposes. The risk
and the gain have been neatly separated by the Eurocrats and the toady figurehead
leadership (Merkozy et al.).

As a result the gain remains safely private with the banks while the risk and losses are
shifted to the taxpayers and citizens of the EU, who must now make good on those
stupendous losses while remaining exposed to the risk of future default.

The same is of course also true in the U.S., another facsimile democracy in which the
government and its proxies guarantee banks' profits and leverage while transferring the
risk and losses to the voiceless taxpayers. (Go try to cast a vote over Fed policy. Serf, meet your
Overlord, Ben Bernanke).

The banks and their lackeys in government prefer to use unaccountable proxy agencies
to do the heavy lifting--the European Central Bank (ECB), the Federal Reserve, and the
European Financial Stability Facility (EFSF), which is soon to be joined with other
alphabet-soup agencies of oppression and predation, all in the name of "rescue."

Rescuing who and what? The banks and bondholders, of course. This requires avoiding
not just democracy but also capitalism, which would require the clearing of bad debt
via the discovery of price of both debt and risk, and also socialism, which would require
wiping out the wealth of the banks and bondholders via nationalization, a process
that would at least return surviving assets and control to an elected government.

It's not democracy, capitalism or socialism--it's all opacity and artifice to
mask the imposition of a new, improved debt-serfdom on Europe, all in the name of
"fiscal unity."

The eurocrats and the toady leadership would be more honest were they to simply
declare: "We had to destroy democracy to save the banks. You are now serfs in
our financial fiefdoms."

"This guy is THE leading visionary on reality.
He routinely discusses things which no one else has talked about, yet,
turn out to be quite relevant months later."
--Walt Howard, commenting about CHS on another blog.

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